Apple Unveils IPhone 5 to Extend Lead in Smartphone Marke

Philip "Phil" Schiller, senior vice president of worldwide marketing at Apple Inc., speaks about the new iPhone 5 which features tighter integration with Facebook Inc. Photographer: David Paul Morris/Bloomberg

Sept. 12 (Bloomberg) -- Apple Inc. unveiled a new version
of the iPhone that boasts a bigger screen, faster chip and
access to speedier wireless networks, an overhaul aimed at
gaining share in the $219.1 billion smartphone market.

The thinner, lighter handset is called iPhone 5 and costs
$199 to $399. It features a casing made of glass and aluminum, a
chip that can process commands more swiftly and a 4-inch screen
-- compared with 3.5 inches on the earlier models. Apple also
revamped its mobile software, adding three-dimensional mapping,
closer integration with Facebook Inc. and improvements on the
Siri voice-recognition tool.

Coming almost a year after the death of Apple co-founder
Steve Jobs, the next iPhone is the first hardware redesign of
the product since 2010. After popularizing handheld touch-screen
devices that offer swift Web downloads and a range of games,
entertainment and productivity tools, Apple is seeking to gain
an advantage over competitors including Samsung Electronics Co.,
Google Inc., Microsoft Corp. and Nokia Oyj in a market that
surged 78 percent last year.

“It’s a beautifully crafted device,” said Chris Jones, an
analyst at Canalys. “They enhanced everything about the
iPhone.”

Even so, the announcement contained few surprises, “given
all the speculation” about the iPhone before today, said Shaw
Wu, an analyst at Sterne Agee & Leach Inc.

Shares gained 1.4 percent to $669.79 as of the close in New
York, extending this year’s surge in Apple’s stock to 65
percent.

Faster Networks

Because Apple only introduces one new iPhone a year, each
unveiling is critical. Apple has sold more than 244 million
units since its 2007 debut, and the handset now accounts for
about two-thirds of profit. Its popularity has led investors to
catapult Apple’s market value to above $620 billion, making it
the world’s most valuable company.

“They have built a juggernaut,” said Matt Murphy, a
partner at Kleiner Perkins Caufield & Byers, a venture capital
firm that invests in iPhone application companies. “This is
going to be an absolutely blowout, home-run product.”

While Google’s Android commands a bigger share of the
mobile-software market and Samsung has more share of phone
hardware globally, the iPhone is the single best-selling line of
smartphones.

Faster Networks

The new iPhone, Apple’s sixth since 2007, works with so-called long-term evolution, or LTE, data networks being
introduced by companies including AT&T Inc. and Verizon
Wireless. Samsung and Google’s Motorola Mobility are among the
manufacturers that have already introduced handsets that run on
LTE, which carriers say enables quicker video, music and other
content downloads, compared with the existing wireless networks.

By adding a bigger screen, Apple also is following a trend
started by other handset makers, including Samsung, HTC Corp.
and Motorola Mobility.

The event highlighted how the level of interest in Apple
has made it almost impossible for the company to keep products
secret. Pictures and features of the new iPhone had leaked out
in the weeks ahead of the event.

“There’s more attention than ever on Apple,” Phil
Schiller, Apple senior vice president for worldwide marketing,
said after the event. “That’s a great thing.”

The new iPhone software will feature tighter integration
with Facebook, letting users quickly post pictures, links and
other content to the largest social network. The partnership is
similar to one announced last year with Twitter Inc.

10 Million

Apple also enhanced the speech-command service Siri, adding
features that let users search for sports scores and make dinner
reservations by speaking to the smartphone.

IPhone 5 goes on sale Sept. 21 and is available for pre-orders on Sept. 14. Apple may sell 10 million iPhones by the end
of September, according to Gene Munster, an analyst at Piper
Jaffray Cos. The company may sell 48.2 million through December,
the average estimate of analysts surveyed by Bloomberg.

During the iPhone event, Apple also announced a new version
of its iPod Touch wireless music player.

Today’s event highlighted Apple’s growing rivalry with
Google, the maker of the Android operating system that powers
about half the world’s smartphones. Apple introduced its own
mapping software to replace Google and also removed Google’s
online video service, YouTube, from the batch of applications
pre-installed on the iPhone.

Suppliers Benefit

With thousands of developers writing programs for Apple’s
App Store, today’s announcement is among the most highly
anticipated technology events of the year. At TechCrunch’s
Disrupt technology conference under way in San Francisco this
week, a whole panel was dedicated to digesting Apple’s news.

The iPhone introduction also can benefit the network of
suppliers that make iPhone components. Samsung manufactures the
microprocessor that is the main brain of the device, while
Qualcomm Inc. is the maker of the chip that connects it to
wireless networks. The iPhone, like other Apple products, is
assembled in China by Foxconn Technology Co.